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Islands still struggle in spite of high funding level

By Gemma Q. Casas SAIPAN, CNMI (Marianas Variety, Jan. 6, 2011) - The United States spent over US$2.4 billion in fiscal year 2009 to partly finance the governments of its territories and independent island nations freely associated with America, according to a report.

Gary Hiles, chief economist of the Guam Department of Labor, which released the report "Review of Federal Expenditure Trends for the U.S. Insular Areas and Freely Associated States (FAS)," said federal expenditures decreased on Guam by 8.9 percent to US$1.39 billion from US$1.53 billion in Fiscal Year 2009.

But federal spending in the Northern Marianas and the American Samoa went up by 44.6 percent and 42.8 percent, respectively, during the period.

The Commonwealth of the Northern Mariana Islands (CNMI) received a total of US$241,476,871 from the federal government in Fiscal Year 2009.

The money covered retirement/disability payments for individuals, grants for different projects, procurement contracts, funding for cooperative agreements, salaries and wages of federal personnel, among other things.

"Federal receipts in the CNMI are primarily in the forms of grants, 70.6 percent, and retirement/disability payments 13.9 percent. The largest single detailed category of expenditures for the CNMI is for airport improvement program at US$23,368,980," the report stated.

Compared to 1996 when the Commonwealth received only US$41 million from the federal government, the amount reflected a 489.4 percent increase.

"Comparing Fiscal Year 2009 to Fiscal Year 2008, federal expenditures decreased on Guam by 8.9 percent. [The Federated States of Micronesia] was up by 131.2 percent, whereas the Commonwealth was up by 44.6 percent, [the Marshall Islands] was up by 57.7 percent, Palau down by 2.3 percent and American Samoa up by 42.8 percent.

The percentage changes vary considerably by area for different historical comparison periods," the report stated.

During the period, the U.S. spent over US$140 million for the Marshalls; US$24.116 million for Palau; US$367.627 million for American Samoa; and US$271.787 for the Federated States of Micronesia (FSM).

"In the Republic of the Marshall Islands and Palau, nearly all of the federal funding is for grants at 96.9 percent and 88.6 percent, respectively. In the FSM, 93.8 percent of the federal funding is in the form of grants," the report further reads.

In the FSM, over US$135 million of the more than US$271 million that the U.S. spent, was for the islands’ economic and political development.

But despite the large amounts that the U.S. spends year after year for its territories and the Freely Associated State, the islands are still struggling economically except for Guam, where there is a large U.S. military presence.

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